Northern Michigan’s 'Disability Belt' now rivals the Deep South and Appalachia

When she was in her 40s, Jolene Mcclellan worked full-time at a retail store and rode motorcycles and pedaled bikes in her spare time.

Three back surgeries later – and with cerebral palsy symptoms worsening – Mcclellan is disabled, relying on a wheelchair and living with constant pain throughout much of her body.

Now nearly 60, she said she hopes to supplement her monthly disability checks by landing a part-time job, maybe answering phones or doing computer work, though she has no use of her right hand from her cerebral palsy – and the recent onset of multiple sclerosis.

“I never knew I was going to get to this point. I never expected it. Not at my age. Not at 59,” Mcclellan said. Her last job, nearly 15 years ago, meant working on her feet for eight hours despite a metal brace on her right foot. “I know people who are 80 who get along better than I do.”

Mcclellan lives in the tiny village of Kingsley, north of Cadillac, on the fringe of an area known darkly as Michigan’s “Disability Belt.”

It’s a label most commonly applied to a wide swath of workers extending from the Deep South up through Appalachia. It signifies a region where post-recession aging workers in poor health and with few prospects for work have turned to federal disability benefits as a last resort, a replacement income for their long-lost unemployment checks.

Less well known is that an area consisting of 17 northern Michigan counties – mostly in the upper Lower Peninsula – qualifies as a separate strand of this Disability Belt, with economic distress nearly as overwhelming as in rural sections of Arkansas, Alabama and West Virginia.

Across this region, an area plagued by persistent unemployment and poverty, a surprising number of desperate workers have turned to Social Security disability benefits to earn a livelihood. Many don’t expect to return to the job market – unless federal investigators throw them off disability rolls.

In some counties, rates of poverty and disability hover around 15 to 20 percent, raising questions about whether a some portion of working-age residents apply for disability as much from despair that they will ever land another job as from physical necessity.

Advocates for the disabled say that is not the case, noting strict eligibility requirements for federal assistance and the fact that most applicants for disability are rejected. But that view is not unanimous.

One of the nation's leading experts on the disability program, economist David Autor of the Massachusetts Institute of Technology, argues that medical advances and improved equipment that can help the disabled return to the workforce are ignored by the Social Security system.

"Social Security Disability Insurance is ineffective in assisting workers with disabilities to reach their employment potential or maintain economic self-sufficiency,” Autor noted in a report he co-wrote in 2010. “Instead, the program provides strong incentives to applicants and beneficiaries to remain permanently out of the labor force."

A new version of early retirement

Northern Michigan is part of a national phenomenon that emerged two decades ago and especially during the Great Recession of 2008-10, when an abrupt decline in blue-collar jobs left certain workers – mostly in their 50s, suffering from chronic medical conditions – unemployed or underemployed for years at a time.

“Good luck finding a job when you’re 52 years old and can’t lift anything or stay on your feet for hours” ‒ Gary Kozma, a disability attorney in Gaylord

They dealt with persistent pain, often job-induced, and eventually found themselves unable to lift heavy items, stand for hours at a time, or even efficiently climb stairs.

With jobs in manufacturing, construction and similar manual labor beyond their reach, these economic outcasts also held little chance of landing employment in the region’s fragile retail sector or service industries. Armed with a high school diploma or less, they were unlikely to find office work.

So, they turned to the Social Security system’s disability insurance.

Gary Kozma, an attorney based in Gaylord who specializes in disability cases, said Social Security checks for the disabled have become almost a form of early retirement in some rural areas where older, unskilled people with debilitating health problems can’t find work.

They may not suffer from the severe disabilities Jolene Mcclellan faces, but they realize their job prospects are dim. Physical and economic pain are a way of life.

“I think when the economy is bad, when there are no jobs to be found, these people think, ‘Maybe I can get disability,’” Kozma said. “Most people still want to work but the (system) realizes … good luck finding a job when you’re 52 years old and can’t lift anything or stay on your feet for hours.”

Kozma said the federal system places disability applicants in categories, a  “grid system” based on age and physical condition and essentially draws a dividing line at age 50 – workers at or above that marker have a much better chance of qualifying for disability benefits than the younger age group.

Those who successfully navigate a system marked by bureaucratic red tape, waiting periods of about two years and can prove their condition prevents them from taking available jobs will receive a monthly check, on average, of about $1,165, according to 2015 data.

Possible changes afoot

The payments are meager yet the number of people receiving disability nationally has risen sharply in recent years, in part due to aging Baby Boomers and millions of women who joined the workforce in the 1970s and now approach retirement age.

In Michigan, approximately 385,000 working-age people receive some form of disability benefits, and the monthly payout across the state is $425 million, according to federal disability data.

While a majority of applicants for disability insurance are rejected, those who make it onto the disability rolls receive a lifeline in the form of a monthly check and qualify for Medicare health care coverage after a 2-year waiting period. Often as important, many people with disabilities, depending on their household income, qualify for Medicaid during those initial two years.

At least for now.

In Washington, federal budget cuts proposed by President Trump are accompanied by continued interest on Capitol Hill in chopping Medicaid funding, despite the implosion last month of the Republican replacement for Obamacare, the American Health Care Act (AHCA). 

The proportion of U.S. workers on disability benefits has more than doubled since 1990, from 2.5 percent that year to 5.2 percent in 2015 – and now totals about 9 million recipients. Michigan has the nation’s 8th-highest disability rate at 8.6 percent.

Bleak times for northern Michigan

In the state’s Disability Belt, the picture is far more bleak. The affected counties have disability rates of 12 percent or higher, according to the Social Security Administration. Advocates for this population contend the true rate is likely far higher.

Many more people between the working age of 18-64 have told the Census Bureau they have a disability, though they receive no government  compensation. Those who work inside the system say many with disabling conditions either decline to apply for benefits or they were rejected by the daunting application process.

In Roscommon County, the area around Houghton Lake, nearly 1-in-4 residents (23.5 percent) lives in poverty. In 2015, roughly 24 percent of residents surveyed by the Census Bureau said they suffer from one or more disabilities. In Montmorency County, between Gaylord and Alpena, 20.8 percent live in poverty and 23.5 percent told census takers they have a disability. In Lake County, 29.9 percent live below the poverty line and 22.4 percent reported a disability.

A rural refrain

Geography, demographics and economics converged to create the Michigan Disability Belt, according to Kathleen Romig, a Michigan native who studies federal disability programs for the Washington-based Center for Budget and Policy Priorities (CBPP).

What these counties have in common are ills afflicting rural communities across much of the nation: an aging population, a rise in middle-age death rates (especially among whites), depressed home values and young people who, once they earn a college degree, flee for urban settings such as Detroit, Grand Rapids or Chicago.

“A rural county in northern Michigan with an older, less educated population and more blue-collar jobs would have a higher rate of (disability insurance) than Washtenaw County, with its many students, professors, etc.,” Romig said.

Indeed, Michigan counties with high levels of disability also tend to have lower percent of residents who are college educated.

In the relatively prosperous communities along the Lake Michigan shoreline where disability rates are average, such as Leelanau, Grand Traverse and Emmet counties, more than 30 percent of the population age 25 or older holds a college degree. In nearby counties in the Disability Belt – Kalkaska, Missaukee, Wexford – college-educated rates are half that percentage or less.

As Bridge has reported, the fall-back position for struggling workers in northern Michigan often involves seasonal positions in the tourism industry, or temporary work in home repair or landscaping. They are often outdoor jobs, where physical limitations lead to income limitations.

Even among skilled workers in more vibrant metro regions such as Detroit, age can be a barrier to employment.

For a northern Michigan worker with a broken-down body, especially those 50 or older, they are often labeled as unemployable. Advocates for the disabled say these people are weeded out from the hiring process by subtle discriminatory practices based on age and ability, or they fail to keep their jobs due to physical constraints.

Blue collar jobs disappearing

The changing economy in northern Michigan ‒ as far as the tip of the Upper Peninsula, where disability rates are also high ‒ has dramatically impacted workers over several decades, said Charles Ballard, a Michigan State University economist.

Mining and lumbering industries are mostly gone. Manufacturing was never a significant presence. In agriculture, while Michigan crop yields remain strong, the farming sector is shrinking and offers fewer job opportunities for unemployed workers who once toiled in manual labor.

The result is a region with few job openings, low incomes and residents with limited purchasing power, all of which reinforces the high number of people seeking resorting to disability benefits.

“Not many new people migrate into the region, and these things feed back on themselves,” Ballard said. “But … the question is, where would they be without DI?  If good jobs are hard to find, then the alternative to DI might well be an even lower income.”

At the same time, federal budget cuts proposed in Washington could disproportionately hurt low-income people, especially those on disability rolls. President Trump’s first-year budget proposal would eliminate four federal block grant programs that assist seniors, the poor and the disabled with affordable housing, home heating bills, public transportation and other anti-poverty services.  

Jim Moore, executive director of the nonprofit Disability Network Northern Michigan, said his clientele would also feel the effects of proposed presidential cutbacks to Meals on Wheels, in-home nursing visits and other programs that allow independent living for the disabled in their own home. Rural hospitals in Michigan have told Bridge they could face financial peril or even closure if the Affordable Care Act is repealed or restricted.

“We’re very concerned about anything that would take away … from those safety-net programs that are critical to people’s well-being,” Moore said.

The federally funded expansion of Medicaid eligibility under the ACA, also known as Obamacare, may be particularly susceptible. Gov. Rick Snyder recently warned that “our most vulnerable citizens” would suffer if the expansion, known as the Healthy Michigan program, and those in 30 other states that took advantage, is eliminated.

A report released in March by the progressive-leaning Center for American Progress found that 41 percent of Michigan’s 609,000 Medicaid recipients with disabilities would have been affected adversely by the failed Republican replacement legislation known as the American Health Care Act (AHCA). The center concluded that any significant reductions to the Medicaid program would force some of the disabled out of their homes and into institutional settings, such as nursing homes.

Rebecca Vallas, director of the center’s “Poverty to Prosperity Program,” argues that removing large numbers of the disabled from Medicaid coverage will end lives.

“People, absolutely, will die,” Vallas said. “This will mean actual deaths and destruction for people who, in many cases, have access to these services for the first time in their lives.”

Two types of disability

Within the federal framework exists two kinds of disability, and two kinds of recipients

One broad category of disability recipients includes victims of accidents or debilitative diseases ranging from cancer to congestive heart failure and multiple sclerosis, as well as developmental disabilities. The blind and deaf also encompass this group.

The second ‒ and far more contested and controversial  ‒  disabled population is dominated by those with “musculoskeletal” problems such as a failing back, knees or hips, and those with some form of mental illness. Other factors such as severe high blood pressure, obesity and diabetes often come into play.

People apply through one of two federal disability programs: Social Security Disability Insurance (SSDI), an earned benefit program for those who accumulate work credits whose payments are linked to their average earnings before they became disabled, and Supplemental Security Income (SSI), which is based more on financial need, regardless of whether you worked or paid into Social Security.

Eligibility depends on whether an applicant can no longer achieve “substantial gainful activity” in the labor market. The rapid rise in disability insurance is mostly associated with musculoskeletal conditions and those with mental illnesses, including chronic anxiety, depression and memory loss, categories that critics say can be too subjective.

Because many of those conditions remain difficult to prove, even with documentation by a physician or specialist, only about 40 percent of applicants make it through the application process, and a backlogged appeals process, without being rejected.

In recent years, Washington has begun to crack down on disability fraud. In 2014, the Social Security Administration (SSA) opened a new Michigan anti-fraud unit based in Detroit that works in conjunction with the state Department of Health and Human Services.

In fiscal year 2016, state officials said the unit handled 115 investigations that saved an estimated $11.8 million in costs for the disability program, Medicaid and Medicare.

The SSA’s Office of Inspector General shifted most of its enforcement emphasis, nearly 90 percent, onto disability cases. Yet, advocates note that the focus on fraud belies the fact that the SSA removes only about 1 percent from the disability rolls each year.  

Is fraud overblown?

Disability advocates in Michigan say their clientele deal with a “scary environment” of  critics who view disability insurance as a welfare program loaded with fraud.

Two recent attempts at aggressive oversight of people receiving financial help from the government produced embarrassing results for state officials. A drug testing requirement for those on welfare produced no offenders. A clampdown on those receiving unemployment checks led to a bungled state computer system failure that falsely accused thousands of workers of fraudulent activity.

Meanwhile, a bill introduced in Congress earlier this year by lawmakers from Arkansas would limit some people to two years of disability benefits.

Norm DeLisle of East Lansing, a disability advocate since 1970, said he has witnessed a half-dozen waves of politically driven efforts to remove people from the disability rolls in his career. Because government health care costs associated with the disabled are far more expensive than for healthy recipients of programs such as Medicaid, DeLisle said, lawmakers tend to target the priciest recipients, labeling them as the beneficiaries of outsized care.

“We have these naïve policy people who think they can reduce costs by targeting people who are the most expensive to care for and reduce their coverage by, let’s say, 5 percent. They think of it in the same way that they decide what new car they should get,” said DeLisle, former director of the Michigan Disability Rights Coalition and now a consultant for the organization.

Academics who study the nation’s disability program say few solutions exist to provide greater incentives for disabled workers to return to work. Disability payments are usually permanent; a worker’s paycheck can disappear at any time.

Reforms proposed by SSA have come and gone. Autor, the MIT economist, who coined the term “Disability Belt,” has proposed private disability insurance that encourages employers to find way to get disabled workers back on the job. A pilot program known as Project Search has achieved success in Michigan transitioning young adult special education students into the workforce.

But perhaps the ultimate solution is to let trend lines run their course. As Baby Boomers reach retirement age, the number of new disability applicants nationwide has dropped for several years. Advances in medical treatments and physical therapy could also make an impact.  

Romig, the native Michigander who studies disability for the CBPP, said reality must set in for policymakers. About 35 percent of disability benefit recipients are age 60 or older, and 75 percent are age 50 or older. All are approaching retirement age.

Many of these people, she said, did not suffer temporary injury that could eventually put them on a path to recovery. Their persistent, worsening health conditions led to the day when they were labeled unemployable.

That would include people like Jolene Mcclellan, the woman from Kingsley. A nearby nonprofit group helps Mcclellan search for some type of work, perhaps a position that involves a few hours a week, where her husband can provide for her transportation.

“I still want to feel like I’m contributing to society,” Mcclellan said. “It really aggravates me that I can’t do what I used to do – simple things.” Her voice trails off.   

Romig said people like Mcclellan are far more common than work-averse cheats trying to game the system.

“By the time a person meets the strict standards for disability insurance, it’s often too late,” Romig said. “Their health has simply declined too much, and they are no longer able to support themselves and their families.

“Even under the best of circumstances, it’s hard for workers to reinvent themselves at age 60. For workers with disabling health problems ‒ especially when combined with limited education and skills ‒ it can be impossible.”